Carey v. Carey

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

SHELLEY TRENNON CAREY, Petitioner/Appellee,

v.

JUANITA SUZANNA CAREY, Respondent/Appellant.

No. 1 CA-CV 20-0552 FC
FILED 8-19-2021

Appeal from the Superior Court in Maricopa County
No. FC2019-092603
The Honorable Marvin L. Davis, Judge

VACATED AND REMANDED

COUNSEL

High Desert Family Law Group, LLP, Phoenix
By Craig Peter Cherney
Counsel for Petitioner/Appellee

Juanita S. Chleboun (Carey), Gilbert
Respondent/Appellant

MEMORANDUM DECISION

Judge David B. Gass delivered the decision of the court, in which Presiding
Judge D. Steven Williams and Judge James B. Morse Jr. joined.
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G A S S, Judge:

¶1 Mother, Juanita Suzanna Carey, appeals the superior court’s
order modifying child support. We vacate the order and remand for further
consideration.

FACTUAL AND PROCEDURAL HISTORY

¶2 Mother and father, Shelley Trennon Carey, were divorced in
2011 in Florida. The dissolution decree ordered the parents to share
parental responsibility for their two minor children, designated mother the
primary residential parent, and gave father parenting time during school
breaks. The Florida court ordered father to pay monthly child support of
$1,700. After the Florida court entered the decree, mother and the children
moved to Arizona, and father moved to Hawaii.

¶3 In 2019, father registered the Florida decree and child support
order in Arizona and petitioned to modify parenting time and child
support. Father sought modification because both parents left Florida, the
parents were not strictly following the Florida decree’s parenting-time
provisions, the children were substantially older and could travel to father’s
home in Hawaii, and both parents’ incomes had changed.

¶4 Mother agreed with some of father’s requested changes but
disputed others. She opposed father’s request to reduce his child support
obligation, arguing he earned more now than when the Florida court set the
original child support amount. She urged the superior court to recalculate
child support based on father’s current income.

¶5 Ultimately, the parties partially resolved the parenting time
issues and the superior court adopted their agreement under Rule 69 of the
Arizona Rules of Family Law Procedure. After a hearing, the superior court
found no significant and continuing change of circumstances to support
modifying the parenting plan outside of the Rule 69 agreement.

¶6 The superior court, however, found modification of the
existing child support order appropriate and reduced father’s monthly
child support payment from $1,700 to $857. The superior court incorporated
a child support worksheet showing the income it attributed to each parent
and the allocation of parenting time.

¶7 Mother timely appealed. This court has jurisdiction under
article VI, section 9, of the Arizona Constitution, and A.R.S. §§ 12-120.21.A.1
and 12-2101.A.1.

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ANALYSIS

¶8 Generally, this court reviews a child support award for an
abuse of discretion, and accepts the superior court’s factual findings unless
clearly erroneous. Sherman v. Sherman, 241 Ariz. 110, 112, ¶ 9 (App. 2016).
In addition, this court defers “to the trial court’s determination of witnesses’
credibility and the weight to give conflicting evidence.” Gutierrez v.
Gutierrez, 193 Ariz. 343, 347, ¶ 13 (App. 1998). De novo review, however,
applies to conclusions of law, including whether specific income or
expenses should be included in the child support calculation. Sherman, 241
Ariz. at 113, ¶ 9; see also Patterson v. Patterson, 226 Ariz. 356, 358–59, ¶¶ 4, 7
(App. 2011). And this court reviews de novo the superior court’s
interpretation of the 2018 Arizona child support guidelines in A.R.S. § 25-
320 appendix (guidelines). Sherman, 241 Ariz. at 113, ¶ 9.

¶9 When, as here, the parties did not request findings of fact or
conclusions of law, this court presumes the superior court “found every fact
necessary to support the judgment” and will affirm if any reasonable
construction of the evidence justifies the decision. Neal v. Neal, 116 Ariz. 590,
592 (1977) (citation omitted).

I. Gross Income

A. Father’s Income

¶10 Mother challenges the superior court’s decision to attribute
$6,748 per month—$80,976 per year—to father as income. She argues the
superior court failed to include a $32,000 salary father received from his
ownership of a business entity and a $622,500 “gift/loan” from his parents.
Our review shows no error.

¶11 Father retired from the military effective June 1, 2020, and his
monthly retirement pay is $4,081. Upon retirement, he also began receiving
a $32,000 annual salary from Merrill, Inc., a company his family owns. The
superior court attributed a total monthly gross income of $6,748 to father,
including $4,081 per month for father’s military retirement pay and $2,667
per month for his Merrill, Inc. salary. In short, the superior court calculated
father’s income correctly.

¶12 Mother also argues the superior court should have treated as
income the $622,500 father received from paternal grandmother. Father
testified paternal grandmother loaned him and his current wife the money
to purchase several businesses and submitted a promissory note
documenting the terms of the loan. Because the promissory note was not

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notarized, mother argues the funds were a gift to father and should be
included in his gross income.

¶13 Depending on the circumstances, the superior court may
attribute gifts and loan proceeds to a parent as gross income in the child
support calculation. Sherman, 241 Ariz. at 114, ¶ 15. “The crucial inquiry is
whether the parent received ‘actual money or cash-like benefits . . . available
for expenditures.’” Id. (citing Cummings v. Cummings, 182 Ariz. 383, 385
(App. 1994)). If the parent acquired “a source of funds for living and
personal expenses, from which the children would have benefited had their
parents not divorced[,]”those monies constitute gross income. Sherman, 241
Ariz. at 114, ¶ 15.

¶14 Father did not use those funds to pay his living expenses, and
no evidence establishes the children would have benefited from the funds
if their parents had not divorced. The superior court did not abuse its
discretion when it concluded father acquired $622,500 from paternal
grandmother to purchase a business and fund its operations, not for living
and personal expenses.

B. Mother’s Income

¶15 In 2019, mother received two forms of income from State
Farm Mutual Automobile Insurance Company. First, she received $39,976
in wages. Beginning June 1, 2019, she received $130,856 in revenue for her
work as an insurance agent operating as an independent contractor.
Mother’s insurance agency incurred $172,694 in business expenses in 2019,
resulting in a loss of $41,838.

¶16 The superior court attributed income of $7,418 per month—
$89,018 annually—to mother. Mother disputes this calculation, claiming
she received no income in 2019 after accounting for her $172,694 business
expenses, which exceeded the $130,856 revenue her insurance agency
generated plus her $39,976 earned income as a State Farm employee. She
argues the superior court erred by attributing $7,418 in monthly income to
her rather than minimum wage.

¶17 The guidelines define gross income as “income from any
source,” including salaries, wages, and unemployment insurance benefits.
Guidelines § 5.A. For “self-employment[,] . . . gross income means gross
receipts minus ordinary and necessary expenses required to produce
income.” Guidelines § 5.C. Mother’s wages constitute gross income
separate and apart from her self-employment income. See guidelines § 5.A.
Mother’s self-employment gross income, calculated separately, is

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determined by subtracting gross losses and expenses from gross receipts.
See guidelines § 5.C.

¶18 We reject mother’s suggestion the superior court was
required to offset her earned wages with her business losses. The guidelines
only allow self-employment or other business income to be offset by the
expenses necessary to generate that income. See guidelines § 5.C. Nothing
in the guidelines requires the superior court to offset wages with losses
incurred in the operation of a business. See generally guidelines § 5; see also
Cummings, 182 Ariz. at 385 (“[G]ross income for child support purposes is
not determined by the gross income shown on the parties’ income tax
returns, but rather on the actual money or cash-like benefits received by the
household which is available for expenditures.”).

¶19 Applying the above, mother had two sources of income:
wages and self-employment. Mother earned $39,976 in wages in 2019, but
she had no income from her self-employment because her $172,694 business
expenses exceeded her $130,856 revenue. The superior court, however,
attributed $89,018 income to mother—an amount equal to her $130,856
business revenue minus her $41,838 losses. As a matter of law, this
calculation is incorrect. See guidelines § 5.

¶20 Accordingly, we vacate the superior court’s child support
award and remand for a redetermination of mother’s gross income. Because
we remand, we note the record shows mother’s agency earned $128,024 in
revenue from January 1, 2020, through June 30, 2020. The record does not
contain mother’s 2020 business expenses. Effective July 1, 2020, State Farm
did not extend mother’s agent agreement. Mother testified she was
receiving unemployment benefits—considered part of gross income—since
then. See guidelines § 5.A.

II. Parenting-Time Costs Adjustment

¶21 Mother contends the superior court erred by crediting father
with 73 days of parenting time per year.

¶22 The guidelines require the superior court to adjust a parent’s
proportionate share of the total child support obligation to account for costs
associated with parenting time. Guidelines § 11. To adjust the child support
obligation, the superior court must determine the total amount of parenting
time awarded to, or historically enjoyed by, the parent with less parenting
time—here father. Guidelines § 11.

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¶23 The superior court credited father with 73 days of parenting
time and reduced his proportionate share of the monthly total support
obligation by $199.08. Mother challenges the credit, arguing the parenting
time schedule reduced father’s parenting time from 73 days to 41 days.
Father argues “the [c]ourt simply reaffirmed the parties’ prior allocation of
[p]arenting [t]ime days as detailed in the original Florida state court
custody orders.” According to father, the only change involved the
adoption of the parties’ agreement giving each parent more parenting time
for each parent’s respective birthday.

¶24 The Florida decree granted father parenting time with the
children over summer break, beginning 5 days after school ends until 5
days before school resumes. The decree also provided for alternating
Thanksgiving, winter, and spring breaks, and gave mother and father
parenting time on their birthdays and on Mother’s Day and Father’s Day,
respectively.

¶25 Father sought to modify the parenting plan to give him
parenting time for one-half of each spring, winter, and fall break, and to
alternate Thanksgiving break. Father sought additional parenting time by
alternating extended or holiday weekends. Father also asked for parenting
time for certain milestone events and to permit the children to visit with his
wife or parents if father could not use his parenting time.

¶26 In her response to the petition, mother agreed to divide the
seasonal school breaks, alternate the Thanksgiving holiday, and allow
parenting time access for milestone events. But mother did not agree to
father’s other requests.

¶27 The parties met for a resolution conference on October 14,
2019, and reached an agreement on some of the parenting-time issues. Their
agreement is not included in the record, though father provided it to the
superior court during an evidentiary hearing. Despite their agreement, the
parties requested clarification and resolution of outstanding parenting-time
issues at the evidentiary hearing.

¶28 At the hearing, the parties agreed each parent would have
additional parenting time on his or her birthday. Outside the birthday
agreement, the superior court found no substantial and continuing change
of circumstances warranting modification of the parenting time schedule to
which the parties had agreed at the October 14, 2019 resolution conference.
The superior court then adopted the parties’ October 14, 2019 parenting
plan and incorporated it by reference in its order. Father, therefore,

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incorrectly argues the only modification involved additional birthday
parenting time, because the superior court also incorporated the October
14, 2019 agreement.

¶29 We cannot determine whether any evidence supported the
superior court’s use of 73 days in the child support calculation because the
October 14, 2019 agreement is not in the record. Typically, if evidence is
omitted from the record, this court presumes the evidence supports the
superior court’s ruling. See Baker v. Baker, 183 Ariz. 70, 73 (App. 1995).
Because we vacate the child support order and remand for the superior
court to determine mother’s gross income and recalculate child support, we
direct the superior court to further consider the parenting-time issue on
remand and suggest the better practice is to ensure a court-approved
parenting plan be filed in the superior court’s docket.

ATTORNEY FEES ON APPEAL

¶30 Father requests his attorney fees on appeal under A.R.S. § 25-
324.A. After considering the relevant factors, we decline to award father
attorney fees without prejudice, but the superior court may consider any
requests for fees on remand, including fees incurred in this appeal, pending
the outcome of this litigation. See Eans-Snoderly v. Snoderly, 249 Ariz. 552,
559, ¶ 27 (App. 2020).

¶31 As the successful party on appeal, we award mother her
reasonable costs under A.R.S. § 12-342 upon compliance with ARCAP 21.

CONCLUSION

¶32 We vacate the superior court’s child support order and
remand to the superior court for recalculation consistent with this decision.

AMY M. WOOD • Clerk of the Court
FILED: AA

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